THE CONSERVATIVE and anti-popular trend of the Peruvian military regime, that had become evident during the course of 1976 and had lead to the dismissal of the remaining progressive officers such as Genjorge Fernandez Maldonadq and Gen Armando Valdes, became even more marked during the last months of 1976 and the beginning of 1977. The rapid rise in prices during 1976 which amounted to 44.8 percent had created massive dissatisfaction with the economic policies of the Morales Bermudez regime and growing support for a left alternative. In the first months of 1977, the government announced an emergency economic plan which amounted to a further reduction of the living standards of the workers and a return to the orthodox liberal economic policies abandoned in 1968 as the only alternative to the growing economic crisis. The response of the working-class organizations was decisive. It took the form of the most effective., disciplined and unitarian general strike that Peru has witnessed since the beginning of this century. In the wake of the general strike the government has unleashed a massive wave of repression aimed at the leadership of the progressive trade union organizations while preparing the conditions fora transfer of power to a block of traditional bourgeois parties.

In November 1976, a new left political force, the Partido Socialist Revolucionario, was founded and made public its Manifesto which called for a continuation of the reforms of the Velasco period in^ socialist direction. The PSR represented an immediate -political threat to the Morales Bermudez government as it brought together a coalition of high-ranking military officers and radicalised intellectuals with a clear base of support among segments of the peasantry and the working class through the Gonfederacion Nacional Agraria (GNA) and the Con-federacion de Trabajadores de la Revolucion Peruana (GTRP). Despite maintaining the suspension of constitutional guarantees and martial law the government permitted the reappearance of seven journals claiming